Proceeds from sale of tech company will be used for First Nations ag investment fund

·5 min read

A portion of the proceeds from the sale of a successful Saskatchewan tech company will help launch File Hills Qu’Appelle (FHQ) Developments into the burgeoning agriculture protein industry. FHQ is the investment and economic development arm of the File Hill’s Qu’Appelle Tribal Council.

“We will be looking to raise capital at some point in the very, very near future that is going to be used so that we can begin … making investments in the protein sector on the ag (side),” said Thomas Benjoe, president and CEO of FHQ Developments.

“That’s a very, very big industry right now in Saskatchewan so we want to make sure that we’re participating on a bigger scale.”

Money to backstop FHQ’s agriculture investment fund, now in its early stages of establishment, will come partially from the almost $1 million profit made off the sale of PLATO Sask back to its sister company New Brunswick-based PQA Testing.

FHQ invested $80,000 into the start-up of PLATO Sask and managed to grow the company even throughout the coronavirus pandemic.

Benjoe explained that PQA Testing was having difficulty getting a foothold for its software testing company in the Saskatchewan market, so it approached FHQ in 2019 to partner on the endeavour.

Instead of solely partnering by having members trained as software testers, Benjoe proposed a business partnership and PLATO Sask was created as its own entity.

It was the right fit. PQA and PLATO Testing founder Keith McIntosh had committed in 2015 to have the software testing company be Indigenous-led and staffed. For his efforts, McIntosh was recognized by the Canadian Council for Aboriginal Business as the 2020 recipient of the Award for Excellence in Aboriginal Relations.

PLATO Sask is an example of the successful limited partnership model that FHQ has employed for the past five years when partnering with major organizations.

“What that meant was that we’d be able to manage the strategy from a governance perspective. We’d be able to set benchmarks and parameters and ensure that there’s Indigenous talent that’s developed within the company,” said Benjoe.

He said it was also important for partner companies to understand “we’re not just a company that’s looking at the bottom line. We’re a company that…values returns based on the livelihood of our people (and) that’s not just Indigenous people but non-Indigenous people who work within our organization because all of those things have a major effect on the economy.”

FHQ had been creating joint ventures in response to pipelines and other infrastructure developments occurring on or around the tribal council’s member 11 First Nations. The joint ventures didn’t hold assets or maintain full staffs.

“I said, ‘I can’t build a business or a portfolio based on things that are just reactive, where we’re chasing the market consistently,’” said Benjoe.

He admits there was some push back from potential partners when FHQ introduced its new development model as “a lot of them wouldn’t want to be committed to creating a whole new entity or didn’t want to see us having greater control over a new entity.”

Benjoe says FHQ stood firm on implementing the new model.

“Our customers now value that model because they see it as … ‘We’re not just selecting a company that can do this work, but we’re selecting a company that’s choosing to do something greater for our community.’ It set us apart from some of our competition and that has worked really well when we’ve been able to secure longer multi-year contracts and deepen relationships with our customers,” said Benjoe.

He says FHQ has seen success from utilizing this business model and continues to invest in more and more businesses.

And FHQ’s own agricultural investment fund is on the horizon.

It is the right time to focus on agriculture and specifically on protein, says Benjoe, when world circumstances, such as the war in the Ukraine and severe drought being experienced by other countries, are taken into consideration.

“There’s not enough livestock in the world to feed our population and keep the amount of protein that they need in their diet so everyone’s looking for alternatives…It’s going to come from protein crops. We need to get ahead of that before other investors begin making significant investments into the protein sector,” said Benjoe.

FHQ will be working with other agriculture investment funds and is also opening up opportunities to other First Nations and territories to invest with them “to create more of a value-added” to the protein crops grown in Saskatchewan.

Limited support is available through the Saskatchewan government in the form of $75 million in loan guarantees and Benjoe is hopeful something may come from the federal government. However, he’s not counting on government support and is more confident about developing investor relationships with partners.

“We want to make sure that we maintain a competitive edge in Saskatchewan, just because of the relationships we have as a development corporation. Because of the success people have seen…they want us to be partners. They see tremendous value in having us as a First Nations partner in these cases,” said Benjoe.

But beyond the agriculture investment fund, Benjoe says he would like to see more partnerships with other First Nations. Instead of other First Nations creating joint ventures with non-Indigenous organizations, they can work with FHQ’s companies and together build assets, train their people, and provide significant financial returns for their communities.

Part of the profit from the sale of PLATO Sask will also be distributed to the 11-member First Nations and the FHQ Tribal Council for community initiatives and priorities. The Nations are spread across southern Saskatchewan and have more than 16,000 citizens.

Windspeaker.com

By Shari Narine, Local Journalism Initiative Reporter, Windspeaker.com, Windspeaker.com